Market Structure and the Multinational Enterprise: A Game-theoretic Approach1
AbstractSince at least the late 1950s, it has been recognized that multinational enterprises operate in imperfect markets characterized by oligopoly. The dominant “transactions-cost” theory of multinational enterprises does not wholly account for why this is so. The reductio ad absurdum of this theory would predict imperfect markets to be sure, but they would be monopolistic rather than oligopolistic. In this article, a simple model based on noncooperative game theory shows how oligopolistic markets can evolve from monopolistic ones. Also shown is that it is neither necessary nor sufficient that a firm have lower costs than its rivals in order to have an incentive to become multinational.© 1998 JIBS. Journal of International Business Studies (1998) 29, 67–83
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Bibliographic InfoArticle provided by Palgrave Macmillan in its journal Journal of International Business Studies.
Volume (Year): 29 (1998)
Issue (Month): 1 (March)
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- Keith Head & Thierry Mayer & John Ries, 2002. "Revisiting Oligopolistic Reaction: Are Decisions on Foreign Direct Investment Strategic Complements?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 11(3), pages 453-472, 09.
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